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Medicaid Update - 2012
Presented by:
Randy C. Bryan, Esq.
The Law Offices of Hoyt & Bryan, LLC
Family Wealth and Legacy Counsellors
254 Plaza Drive Oviedo, Florida 32765 (407) 977-8080 – voice
(407) 977-8078 - fax
www.HoytBryan.com© 2012 – Hoyt & Bryan, LLC
What are the Costs?
Medicaid Update - 2012
How Are You Going to Pay for It?LLTTCC
CCOOSSTTSS
LLTTCC
CCOOSSTTSS
LTC INSURANCE?
PERSONAL ASSETS?
FAMILY?
MEDICARE?
MEDICARE SUPPLEMENT?
VETERANS AFFAIRS?
MEDICAID?
Medicare Coverage of Nursing Home Care
For skilled care, Medicare will pay the full cost of stay in a nursing home facility for only 20 days. It will pay a part of the cost for the next 80 days, and absolutely nothing after 100 days.
BENEFIT MEDICARE PAYS YOU PAY
First 20 Days 100% of NOTHINGApproved Amount
Next 80 Days All But $144.50/Day $144.50/Day
Beyond 100 Days NOTHING ALL COSTS
Medicaid Update - 2012
How Are You Going to Pay for It?LLTTCC
CCOOSSTTSS
LLTTCC
CCOOSSTTSS
LTC INSURANCE?
PERSONAL ASSETS?
FAMILY?
MEDICARE?
MEDICARE SUPPLEMENT?
VETERANS AFFAIRS?
MEDICAID?
Medicaid Law Development• Medicaid Spend Down• Spousal Impoverishment Rule (1988)• Irrevocable Trust Planning• OBRA (1993)• “Granny Goes to Jail” Law - and her lawyer too! (1997)• “Only Granny’s lawyer goes to jail” (1998)• Nobody goes to jail anymore! (1999)
• Deficit Reduction Act of 2005– Passed by U.S. Congress in (2006)– Implemented in Florida 11/1/2007 & 1/1/2010
Medicaid Update - 2012
Eligibility Criteria for Medicaid In a facility that accepts Medicaid or enrolled in a Medicaid Waiver
Program At least 65 years of age or disabled Citizen or permanent resident alien Resident of Florida Medical need for nursing home care Income Cap (only person in nursing home) Asset Cap (person in nursing home & spouse) Not be under a penalty period b/c of prior uncompensated transfer
Medicaid Update - 2012
Income of Medicaid Applicant $2,094/month GROSS income (2012) Add back in
Premiums for Medigap insurance Premiums for health/hospital insurance Part B reduction- $99.90 Life Insurance premiums taxes garnishments guardianship fees
Medicaid Update - 2012
Average cost of nursing home care in Florida $7,500/month
GAP
Medicaid Income Cap $2,094/month
Medicaid Update - 2012
Qualified Income Trust (a/k/a “Miller” Trust)
Required any time the institutionalized spouse’s income exceeds $2,094/month
Applicant must meet all other eligibility requirements
Trust must be prepared by attorney
Medicaid Update - 2012
Who can establish a QIT?
Medicaid Applicant (if competent) Applicant’s spouse (w/o DPOA) Attorney-in-fact (if authorized by DPOA) Court
Medicaid Update - 2012
Assets of the Applicant cannot exceed $2,000
Assets of the Community Spouse cannot exceed $113,640 (2012)
Medicaid Update - 2012
Exempt or Non-countable Assets
Homestead Vehicle Life Insurance* Irrevocable prepaid burial contract Burial Account* One wedding/engagement ring
Medicaid Update - 2012
Countable Assets Include Basically Everything ElseGeneral Rule - if you can access the principal, count it
Bank accounts / CD’s / money market accountsNon-homestead real estateStocks & bondsMore than one vehicleRevocable burial contractsAssets in Revocable Living TrustAssets in a Guardianship Jointly held assets
Medicaid Update - 2012
Hybrid Assets
Retirement Funds Annuities
Medicaid Update - 2012
Planning for the Asset Test
Medicaid Update - 2012
Calculating the Spend Down: Penalty Divisor = $5,000/month – in process of changing to $6,880.50
Gifting: transfers Exempt vs. Non-Exempt
IRS gifts vs. Medicaid gifts
Medicaid Update - 2012
Effect of an Uncompensated Transfer
Does not result in disqualification Can result in a period of ineligibility or
“penalty period” based on the date and amount of the transfer
Medicaid Update - 2012
How to Spend Down:
Look back period 3 years – (prior to January 1, 2010)
5 years – (on or after January 1, 2010)
Penalty Period/Waiting Period
Medicaid Update - 2012
LAW : “Lookback” starts when applicant resides in Nursing Home and applies for Medicaid Benefits
5 years For gifts prior to 11/1/2007, “penalty” starts
when gift/transfer is madeFor gifts after 11/1/2007, “penalty” starts on
application for Medicaid benefits Runs at approximately $5,000/month
The timing of the application is CRITICAL
Medicaid Update - 2012
Disadvantages of Transferring Assets Loss of Control Divorce Judgment Creditors Misuse of Funds Loss of step-up in basis Loss of financial aid Gift taxes Early death of adult child Coordination with estate planning
Medicaid Update - 2012
Coordination with Estate Planning Critical Planning Issues when spouse is in a
nursing home or may require nursing home care in the future
Effective October 1, 2001 cannot disinherit spouseJoint ownership/beneficiary designation pitfalls
Must utilize “Special” Planning to protect assets from Medicaid spend down
Medicaid Update - 2012
Issues on the HorizonMedicaid Reform ImplementationBlock GrantsContinued Shrinkage of Medicaid DollarsRepeal of CLASS ActIncreased importance of Preventative Planning
Long-Term Care InsuranceIrrevocable Trust Planning
Medicaid Update - 2012
